Monday 18 June 2018

PTSB closes in on €1.25bn loan sale

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Gretchen Friemann

State-backed bank, Permanent TSB, is expected to select advisers to a €1.25bn portfolio of distressed buy-to-let mortgages this week as preparations for its first loan sale since last year's exit from the UK business intensify.

A beauty parade of several accountancy firms and investment banks was held in the past fortnight as the bank accelerates efforts to cut its soured debts exposure amid heightened pressure on the sector from the European Central Bank.

PTSB's decision to auction a bundle of non-performing loans comes as AIB also readies a multi-billion euro of residential mortgages for sale in a process dubbed Project Redwood.

It's understood formal marketing for that portfolio may be underway before the end of the year. Yet it is PTSB that faces the greatest pressure to cut its NPLs after the bank, still 75pc owned by the taxpayer, showed zero momentum in tackling this issue at its latest results in July.

It is understood the lender halted efforts to reduce its soured debt exposures, which stand at 28pc of its entire loan book, in order to bulletproof the business against any further problems relating to tracker mortgages.

More than 20 customers lost their homes after PTSB wrongly denied the borrowers lower tracker rates.

The bank's loan portfolio is expected to contain some of its most intractable buy-to-let mortgages but may also include less impaired loans to improve the assets' valuation prospects.

PTSB's holds €5.78bn worth of troubled loans on its books, more than half of which are in some form of treatment.

Irish Independent

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